Economic overview

[John Raabe]

I know there are several members watching the big picture economic trends and I have just finished a powerful read and wanted to share the ideas.

First, recently the stock market has been making a strong rally after a brutal pounding of many months. Beware the "dead cat bounce" (if dropped from a high enough point even a dead cat will "bounce").

This downturn is of a far different scope than any in our living memory. There are big structural changes going on, both to the economy and the social environment. It will take some time for us to even understand what has already happened.

An understanding of the historic significance of this 20 year "crisis" cycle can be gained from "The Fourth Turning", by Strauss and Howe - http://www.amazon.com/Fourth-Turning-William-Strauss/dp/0767900464/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1238171198&sr=8-1.

(Read some of the recent reviews and you may not have to read the book!)

The short overview: Four historic cycles of 20-25 years (a human generation) go through a long cycle of a human lifetime (80-100 years). This has been going on for at least 500 years and the patterns are much like seasonal patterns - while the specific weather varies each year, the climate cycles repeat. You never get a spring at the start of winter.

We are moving into the winter cycle. Other winters include: the 1930's-40's depression & WW2, 1850's civil war, 1770's American revolution (each 80-100 yrs ago). Written in 1997, the authors' cyclic predictions are unfolding right on schedule.

[Bishopknight]

All my friends are convinced were magically going to bounce right back from this.

There was a great Rolling Stone article last week about how serious the problem is and how AIG had a big part in it. I seriously encourage everyone to read the entire article. Its long but its very important to understand the issues.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

[John Raabe]

Good overview of the AIG mess.

Now, on to debasing the currency by "buying" treasury debt with magical cyber-dollars (IOUs against the future?)

Einstein said we can't solve current problems using the same thinking that got us into the problem in the first place.

Isn't taking on debt we have no chance of repaying the thinking that got us into this pickle?

[MaineRhino]

Great article BK. I saw that the other day.. good read!

I also think we will bounce back from this mess, at least long enough for us (we the sheeple) to go even further in debt, and to rely even more on the government handouts.

In the last month I have talked to many contractors who are hurting, but there are many who are in the process of quoting jobs in this area. I don't expect things to get much better until next spring. Then I can see 3-5 years of prosperity, before it comes crashing down again, even worse than now.

Luckily, most of the people reading this are like-minded. That's why we're here, right? We (members of this forum) are not the "NORM", and are preparing for the dismal future. 

My advice? Prepare for the inevitable..... Build smart, stockpile supplies, learn self-defense, learn to shoot, surround yourself with like-minded persons. The sky is not falling, but it is getting closer!

[peternap]

I'm not so sure 3-5 years will bring it back. The sky is falling talk is a smokescreen for the real goins on. The bill to regulate farmers is just one example. They are trying to tighten the fist so when the other shoe does drop, they will have some control.

I'll repeat what I've often said....we have never seen anything like this. Muldoon suggested everyone keep a journal. I agree because we're seeing chunks fall out of our concrete wall and it is going to completely collapse if we can't turn it around.

This is going to be a real interesting summer.

[ScottA]

This government is not looking ahead to the future. Debt is meaningless because they have no intention of ever repaying it. I belive we are watching a system die. This government knows that and so is using it's last  powers to transfer as much wealth as possible before the new system is born. Be that global government or the breakup of America is an unknown at this point (I belive both are possible) but the current system is in it's last days. I don't think even the powers that be can agree on a course of action and they are paralized by their bickering.

Here's the issue no one wants to face...America and China and India and Russia and the EU can't all be rich. Someone has to suffer for another to prosper. The global economy has started to spread wealth around the world and has made some countries more wealthy and other countrys less wealthy. Money is power so the powers start to shift with the wealth. This can mean nothing but trouble.

[glenn kangiser]

I just stopped by a friends place on the way home.  He lives halfway between me and the cities - several of them.

He has a trailer ready to go whenever he may need to.  No telling, yet he still lives each day like it is OK.

He knows it is not.  He was deep into the military and has a good understanding of the current powers that be.

He said when it goes down that not even the horses in his field will be safe from the starving masses in the cities.

Preparing for whatever we may be dealt as well as possible can't hurt.

[muldoon]

I have not read that particular book but it sounds like it is referring to the K winter cycle.  It is a good explanation of whats going on from a cyclical perspective.  http://www.kwaves.com/kond_overview.htm

some neat charts






As for a collapse in 2000/2001 that the book above referenced- that may not be a ridiculous as it first sounds. 

The collapse of the tech market and NASDAQ, Enron, Aldelphia, K-Mart, Global Crossing, WorldCom, Arthur Anderson and numerous others are the corporate face of the scandals and the debt collapse. On the country side we have the implosion of Argentina and possibly Brazil, which would imperil all of Latin America. African countries never seem to be out of bankruptcy.   We had a war, and a debt/credit frenzy.  It pulled us from entering k-winter in 2001.  The "hyperinflation" needed to expand it was in derivatives and collaterized debt obligations.  But the problem with any exponential system is that it must continue to grow bigger than before which by definition cannot be accomplished.  By artificially keeping the game going longer - they ensured it would be that much worse when it reverted. 

[Alasdair]

Einstein said we can't solve current problems using the same thinking that got us into the problem in the first place.

Isn't taking on debt we have no chance of repaying the thinking that got us into this pickle?

Reminds me of a National Geographic article I read on peak oil (another facet of the same problem?)- The line that stuck with me was

"We didn't get out of the stone age because we ran out of stones!"

Something's gotta change ...